Hondutel to save US$20mn with staff cuts

Honduras state-owned telco Hondutel is expected to save around US$20mn a year by reducing its staff.

The telco will reduce its costs by 454mn lempiras (US$20.6mn) annually due to downsizing, general manager Jesús Mejía was reported as saying by newspaper La Tribuna. Staff-related costs and associated expenses will remain at 53.5mn lempiras, Mejía said.

Hondutel has been in full cost-cutting mode for the last months, including shutting down customer service centers and shedding half its managerial positions under an early retirement scheme, as well as suspending 700 workers who had turned down an offer of early retirement.

Mejía said the redundancy packages for the terminated employees are also ready.

The telco, which has been flirting with bankruptcy for the last couple of years, needs to bring in 100mn lempiras in extra revenues next year in order to stay afloat.

The operator has budgeted 2bn lempiras for 2016, and operating costs will require 8mn lempiras per month. In May, Hondutel forecast a profit of 100mn lempiras by the end of next year.

Mejía said that the company is planning to launch broadband and high-speed internet next year, so the deployment of a fiber optic network is a priority. This deployment will cost the telco 20mn lempiras.

The telco forecasts profits of between 20mn and 30mn lempiras for 2015.

Last year the company made a loss of 238mn lempiras, but that was a significant improvement from 2013, when it reported a loss of 752mn lempiras.